My medical devices company thinks they're a f*cking bitcoin trader
20240901 AUD EUR JPY USD portfolio trades & when systematic ignorance fails
Hi all, and welcome to the Two Crows Week#1 portfolio picks for September 2024. Before we get started, I just need to say:
AAAAAAAAAAAAAARRRRRRRRRGGGGGGGGGGHHHHHHHHH!!!!! FUCK!!!
You see, I’ve just experienced the painful downside using a largely systematic, agnostic-to-company-details and willfully-ignorant investment approach. An approach in which I intentionally avoid reading announcements and articles ABOUT the companies I invest in, as well as statements written BY the companies I invest in, as much as possible. My own behavioural and psychological weaknesses make it hard for me to detect politics and bullshit. I’m inclined to be overly trusting and when reading press-releases, I am easily swayed by good story-teller management with rosey projections about their companies’ futures’ — maybe I want to believe people are honest and good?1
Conflictingly, at the same time my somewhat skeptical—and-at-times-cynical nature means I am also prone to absorbing those dire, click-bait forecasts of imminent economic doom that fill up the financial news. The DOLLAR IS ENDING! INFLATION IS HERE! NO WAIT, RECESSION IS HERE! NO WAIT, IT’S SOCIETAL COLLAPSE AND PEAK OIL AND… you get the idea.
As you can imagine, this mix produces quite a bipolar-esque emotional state (in which I swing manically between thinking a company/the economy/the future is great-bad-great-bad…) and is a large part of why I abandoned any deep-dive fundamentals-researcher-style. I know I ain’t no Phil Fisher, able to invest after first carefully collecting broad, varied opinions and “scuttlebutt” from competitors and peers. Nor am I a pure Ben Graham disciple who dives deep into forensic accounting or who believes I might somehow parse out hidden truths overlooked by other investors if only I could read the cashflow statement footnotes closely enough.
We live in a world where on a daily basis financial news reports will hype and shower us with stories about market darling stocks like Lasertec, which has apparently rocketed sales and profits with a share price increase of 800% over 5 years, whilst at the same time short sellers call it a ticking timebomb and colossal fraud. We live in a world where Cathy Wood says Tesla shares are worth $3000 each while legendary short-seller Jim Chanos thinks they’re worth closer to $zero, so after reading those disparate takes by famous, public, arguably successful investors, how to know and what to do?
I aim to skip the stories, avoid overconfidence in my own analysis, and be systematic, patient and largely numbers-driven. I aim to spread my bets, and believe that in the long term, the outcome will be more than satisfactory — even if a few duds slip through.
So on a day like today when I DO stumble across the news that one of my portfolio holdings — ostensibly a health-tech company — Semler Scientific, is trading bitcoin, as the saying goes: I’m not mad… just disappointed.
Morningstar tells us that Semler is “engaged in providing technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. It focuses on developing, manufacturing, and marketing proprietary products and services that assist customers, including insurance plans, physicians, and risk assessment groups, in evaluating and treating chronic diseases. The company markets its vascular-testing product under the QuantaFlo brand, which is a four-minute in-office blood flow test”.
Which part of that, suggests that they should be trading bitcoin like they’re the freaking President of El Salvador?
Whether its dying photography company Kodak issuing their own cryptocurrency, or dying cinematic theatre company AMC buying a gold mine, or really ANY time a company starts dabbling in something outside their main business expertise (or especially, start marketing based upon their having strayed outside their main business expertise) to start speculating on some wildly unrelated business venture or gambling on foreign currency exchange rates, or trading exotic derivatives or even making perfume that smells like motorcycle grease2— whatever — history tells us to be cautious.
And, while its true that I find myself in this situation precisely BECAUSE I avoid reading up extensively on the stocks my algorithms suggest, I do admit this situation is particularly painful and a bit embarassing because I only just (recently) purchased Semler. Had I noticed their cryptocurrency escapades earlier (they appparently started buying bitcoin circa May 2024?) I would have avoided the trouble and the trading activity.
Luckily, this is easy to fix — Semler Scientific (aka Judas), gets immediately, unflinchingly, sold.
Monthly portfolio commentary
In addition to the aforementioned Semler, this month sees a couple additional sales in the JPY and USD portfolios but, oddly enough, still nothing in our lagging sheep EUR portfolio. In most cases, the sales are housecleaning out of a stocks with earnings declines forecast, combined with current excessive price-to-sales or other indicators flagged by our algorithm, and we redeploy that cash into more promising opportunities. Nothing particularly noteworthy storywise though (translation: at least they aren’t trading fucking bitcoin).
On to this month’s stock selections for the Two Crows Systematic AUD, EUR, JPY and USD “Week#1” portfolios.
Monthly Trades for AUD, EUR, JPY and USD
AUD denominated stocks (50 000 AUD + divs/sales)
BUY ALL.AX - Aristocrat Leisure Ltd: 70 shares @ $54.04
BUY CUV.AX - Clinuvel Pharmaceuticals Ltd: 245 shares @ $15.41
BUY DUR.AX - Duratec Ltd: 3047 shares @ $1.24
BUY FID.AX - Fiducian Group Ltd: 463 shares @ $8.16
BUY HIT.AX - HiTech Group Australia Ltd: 1861 shares @ $2.03
BUY JIN.AX - Jumbo Interactive Ltd: 274 shares @ $13.81
BUY KOV.AX - Korvest Ltd: 379 shares @ $9.98
BUY LOV.AX - Lovisa Holdings Ltd: 122 shares @ $31
BUY LYL.AX - Lycopodium Ltd: 309 shares @ $12.21
BUY MAD.AX - Mader Group Ltd: 750 shares @ $5.04
BUY PRU.AX - Perseus Mining Ltd: 1399 shares @ $2.7
BUY PWH.AX - PWR Holdings Ltd: 425 shares @ $8.89
BUY VLS.AX - Vita Life Sciences Ltd: 1702 shares @ $2.22
BUY VYS.AX - Vysarn Ltd: 9689 shares @ $0.39
EUR denominated stocks (50 000 EUR + divs + sales)
BUY ADMCM.HE - Admicom Oyj: 77 shares @ $49.8
BUY BETS-B.ST - Betsson AB: 339 shares @ $11.35
BUY CAT1.DE - Caterpillar Inc.: 12 shares @ $318.5
BUY CBAV.MC - Clínica Baviera, S.A.: 130 shares @ $29.6
BUY COM.MI - Comer Industries S.p.A.: 117 shares @ $33
BUY E3G1.SG - Evolution AB: 41 shares @ $94.72
BUY KRI.AT - Kri-Kri Milk Industry S.A.: 317 shares @ $12.15
BUY MELE.BR - Melexis NV: 48 shares @ $80.9
BUY MOUR.BR - Moury Construct SA: 8 shares @ $505
BUY PVN.MI - Piovan S.p.A.: 281 shares @ $13.7
BUY CATG.PA - SA Catana Group: 740 shares @ $5.2
BUY UNITED.HE - United Bankers Oyj: 210 shares @ $18.3
BUY WAVE.PA - Wavestone SA: 69 shares @ $56.1
JPY denominated stocks (5 000 000 JPY + divs/sales)
SELL 4763.T - CREEK & RIVER Co., Ltd.: 227 shares @ $1493
SELL 7729.T - Tokyo Seimitsu Co., Ltd.: 110 shares @ $8283
BUY 3836.T - Avant Corporation: 259 shares @ $1789
BUY 6532.T - BayCurrent Consulting, Inc.: 102 shares @ $4562
BUY 9697.T - Capcom Co., Ltd.: 149 shares @ $3103
BUY 2326.T - Digital Arts Inc.: 107 shares @ $4320
BUY 7148.T - Financial Products Group Co., Ltd.: 197 shares @ $2352
BUY 3150.T - gremz,Inc.: 178 shares @ $2606
BUY 6866.T - Hioki E.E. Corporation: 57 shares @ $8110
BUY 2124.T - JAC Recruitment Co., Ltd.: 612 shares @ $758
BUY 6920.T - Lasertec Corporation: 16 shares @ $28315
BUY 4318.T - Quick Co.,Ltd.: 214 shares @ $2166
BUY 6777.T - santec Holdings Corporation: 67 shares @ $6880
BUY 7839.T - Shoei Co., Ltd.: 197 shares @ $2356
BUY 6196.T - Strike Company,Ltd: 105 shares @ $4420
BUY 4792.T - YAMADA Consulting Group Co.,Ltd.: 205 shares @ $2261
USD denominated stocks (50 000 USD + divs/sales)
SELL LSCC - Lattice Semiconductor Corporation: 82 shares @ $47.05
SELL MCHP - Microchip Technology Incorporated: 173 shares @ $80.98
SELL SMLR - Semler Scientific, Inc.: 282 shares @ $27.36
BUY GOOG - Alphabet Inc.: 33 shares @ $163.4
BUY AMAT - Applied Materials, Inc.: 28 shares @ $192.98
BUY ASHTF - Ashtead Group plc: 76 shares @ $71.03
BUY BKNG - Booking Holdings Inc.: 1 shares @ $3890.81
BUY CORT - Corcept Therapeutics Incorporated: 154 shares @ $35.14
BUY FTNT - Fortinet, Inc.: 71 shares @ $76.27
BUY IRMD - IRadimed Corporation: 115 shares @ $47
BUY KNSL - Kinsale Capital Group, Inc.: 11 shares @ $486.08
BUY MANH - Manhattan Associates, Inc.: 20 shares @ $263.36
BUY ORLY - O'Reilly Automotive, Inc.: 5 shares @ $1138.47
BUY PAYC - Paycom Software, Inc.: 33 shares @ $163.55
BUY QLYS - Qualys, Inc.: 43 shares @ $125.71
BUY RMD - ResMed Inc.: 22 shares @ $243.16
BUY V - Visa Inc.: 20 shares @ $274.32
As always, thanks for reading, and please feel free to get in touch if you’re interested in systematic investment and modelling.
Narrator: He does not, as a general rule, believe that.